RPC 5.6 and settlement agreements: The TN BPR messes up another ethics opinion.

This is not truly a development that merits the “Bad Ethics Opinion or the Worst Ethics Opinion” treatment, but it is a development that deserves commentary.

Last week while my wife and I were getting some short R&R, the Tennessee Board of Professional Responsibility issued Formal Ethics Opinion 2018-F-166.  If all you read of it were the first two paragraphs, it would sound like a reasonable (albeit somewhat circular) ethics opinion to have issued:

The Board of Professional Responsibility has been requested to issue a Formal Ethics Opinion on the ethical propriety of a settlement agreement which contains a confidentiality provision that prohibits any discussion of any facet of the settlement agreement with any other person or entity, regardless of the circumstances, and which prohibits the requesting attorney from referencing the incident central to the plaintiff’s case, the year, make, and model of the subject vehicle or the identity of the Defendants.

OPINION

It is improper for an attorney to propose or accept a provision in a settlement agreement that requires the attorney to be bound by a confidentiality clause that prohibits a lawyer from future use of information learned during the representation or disclosure of information that is publicly available or that would be available through discovery in other cases as part of the settlement, if that action will restrict the attorney’s representation of other clients.

So, again, that sounds reasonable in a vacuum (and it’s that last clause that makes it relatively circular as an application of RPC 5.6.  As the opinion makes clear that the rule on which it is premised and hinges is RPC 5.6(b), which provides:  “A lawyer shall not participate in offering or making: (b) an agreement in which a restriction on the lawyer’s right to practice is part of the settlement of a client controversy.”

But, this opinion isn’t issued in a vacuum.  It manages over the course of 4 pages to barely acknowledge the existence of an earlier-issued ethics opinion — Formal Ethics Opinion 98-F-141.  It also doesn’t even mention the existence of a more recent Formal Ethics Opinion 2010-F-154.  Those oversights are extremely unfortunate because the existence of those two FEOs should have made the issuance of this new FEO entirely unnecessary.

FEO 98-F-141 explained that a plaintiff’s attorney should not be required to, and should not agree to, be a party to a release and settlement agreement of their client unless the attorney is specifically releasing a claim for attorney fees.  Otherwise, being a party to the release creates conflict of interest issues between the client and the lawyer.  FEO 2010-F-154 repeated this guidance as part of explaining why – despite the problems associated with Medicare super liens — settlement agreements could not require the lawyer for the plaintiff to agree to indemnify the defendants for such liens.  Thus, the second paragraph of FEO 2018-F-166 (if it was ever issued at all) could have read:

We have already opined in FEO 98-F-141 and FEO 2010-F-154 that it is unethical for a plaintiff’s attorney to be required to, or to agree to, be a party to a client’s release and settlement agreement.  For any such provisions to be enforceable against plaintiff’s counsel, (s)he would have to be a party to the settlement agreement, which we’ve already explained is a no-no.  As long as the lawyer is not an actual party to the agreement, then any such provisions are only binding upon the client – not the lawyer — and whether or not the client wishes to agree to them is up to the client given that RPC 1.2(a) declares that the client’s decision to settle a case is something that a lawyer has to abide.  Thus, if a client wants to agree to terms of settlement that are lawful and the lawyer cannot be held to those terms as a party, then the client gets to do as the client wishes in that respect.

And then, FEO 2018-F-166 could have stopped right there.

Since it didn’t go down that way, this new opinion is, at best, unhelpful to the extent that it implies that a client doesn’t have the right to agree to things that they obviously would have the right to agree to or that it implies that if a client does it is somehow binding on the client’s lawyer going forward in future situations even if the lawyer is not a party to the release and settlement agreement and not bound thereby.

An incredibly unhelpful ethics opinion from Colorado

Were you looking for something that is very well-written but entirely unhelpful to your needs as a lawyer?  Well, you’ve come to the right place today.

Wait, I now see how that paragraph could be misconstrued in an entirely unflattering way and as an inadvertent passing of judgment on this whole blog.  Obviously, I didn’t mean that.  After all, I said “well-written.”

Anyway, what I’m actually intending to refer to is Colorado Formal Ethics Opinion 134 which was enacted in January 2018 but which was brought to my attention by a loyal reader of this space.  It likely came into his path because of some treatment in the ABA/BNA Lawyers’ Manual which I admittedly have not read beyond their headline and lead sentence, which is as follows:

Advance Agreements on Joint Settlement OK, Colorado Bar Says

A lawyer who represents multiple clients in a case can prepare for them, with informed consent, an agreement stating that a majority vote controls for settlement offers, a recent Colorado bar ethics opinion says.

That is one way to spin the Colorado opinion and draw peoples attention, but studying the opinon itself reveals that the picture being painted is far too rosy because a more fair introduction to the opinion would be:

Advance Agreements on Joint Settlement OK to Memorialize But Lawyer Can’t Enforce It in the Future, Colorado Bar Says

A lawyer who represents multiple clients in a case can prepare for them, with informed consent, an agreement stating that a majority vote controls for settlement offers, a recent Colorado bar ethics opinion says, but what would be the point?  The same opinion explains that if any of the clients later rejects the settlement and refuses to abide by the majority vote then the lawyer doesn’t have settlement authority and can’t continue to represent everybody.

I’m not kidding.  That is the TL/DR version of Colorado Formal Opinion 134.  Don’t believe me, go read it for yourself.

Now, Colorado may feel like it has given a helpful opinion because it distinguishes its opinion from some others by saying it is perfectly ethical for a lawyer to participate in preparing an agreement along these lines for jointly represented clients and explaining how Rule 1.8(g) is not triggered until some future point when a settlement is on the table for consideration.  But . . . geez.  From a practical perspective, it’s an exercise in navel-gazing because of this paragraph of the opinion:

If multiple clients agree in advance on a majority-decision rule for how they will respond to an aggregate settlement proposal, but one client in the future refuses to follow the majority’s decision, the dissenting client might be in breach of that agreement.  The other clients might have claims against the dissenting client.  This circumstance creates an unwaivable conflict for their joint lawyer due to the dispute between in the dissenting client and the other clients.  The lawyer may not take sides in the dispute, and may not seek to enforce the agreement againts the dissenting client, on behalf of the majority clients, by compelling the dissenting client to settle.  The lawyer might need to withdraw from the joint representation entirely.

Because of that, it seems hard to understand how any good Colorado lawyer armed with this opinion could ever respond to an inquiry by joint clients about putting together a majority-rule agreement with any advice other than:

Yeah, you don’t want me to go through all of that.  If anyone changes their mind later, I can’t enforce it and you probably just end up in additional litigation maybe over breaching the contract and you all just end up having to hire more and different lawyers.  So, let’s just wait until we have something in front of us to think about on settlement some day and then work it out if and when that day ever comes around.

 

 

 

Bad ethics opinion or the worst ethics opinion? Tenn. FEO 2016-F-161 edition

I haven’t rolled a post out with this title in a while, but the more truthful title when it comes to an ethics opinion, issued here in Tennessee on September 9, 2016 would be: “More bad than worthless or more worthless than bad?”

First, the good news.  Tenn. Formal Ethics Op. 2016-F-161 is short.  It won’t take you but maybe five minutes to read it in full.  You’ll never get those 5 minutes back, but…

Now, the not-so-good news … Formal Ethics Opinion 2016-F-161 could have been a whole lot shorter, maybe only a paragraph — in fact, the first paragraph with the heading “OPINION” probably would have sufficed.  It states a premise that isn’t necessarily incorrect — a settlement agreement that would require an attorney to return work product violates RPC 5.6(b) if it restricts the lawyers ability to represent other clients– but it doesn’t do anything more than that.

To the extent it does, it isn’t exactly helpful because it works from a premise that doesn’t involve something that clearly involves work-product, and not surprisingly (given that it treats something as if it were work-product when that is less than clear) it doesn’t really explain why one thing might be okay and the other not.

If you were looking for a jumping off point to make the point that a demand for relinquishing work-product as part of a settlement agreement could violate RPC 5.6, I’m not sure this is the premise to pick:

Plaintiff’s counsel received from Defendant 541,927 pages in image form and had to electronically covert every single page to a pdf document.  Plaintiff’s counsel then processed the 541,927 pages with optical character recognition to make each document searchable.  The documents were then organized by relevant subtopics and incorporated into demonstrative exhibits.  Creating this work product was the only way to understand the complex issues in the case, articulated the product defects, depose experts, present claims, and ultimately reach a successful settlement for the client.  Plaintiff’s counsel relied on the produced materials to cut a full-size vehicle into parts for use in explaining complex engineering, vehicle dynamics, and safety mechanisms to the jury.  This demonstrative evidence is useless without the underlying work product.

In addition to the way in which that description reads like the inquiring attorney wrote it, did you catch the part there where things went askew?  Of course, you did.  It was that moment where they wrote “Creating this work product…” despite not having referenced any creation of work product.

What they described was the production of materials by the other side in discovery.  Converting TIFFs to PDFs doesn’t turn the other side’s document production into your work product.  OCR’ing those PDFs doesn’t do that either.  The incorporation of certain aspects of the discovery into demonstrative exhibits might rise to the level of the creation of work product, but the demonstrative exhibits would be the work product not the source material that was added to them as a component part.  But even giving the Board the benefit of doubt, the opinion doesn’t exactly tackle whether (or how) the request to return discovery materials also requires the return of additional things — work product — that incorporate parts of the discovery materials.

The opinion also doesn’t clearly indicate that the settlement agreement being examined requires anything to be returned besides discovery documents produced.  What is says is this: “The parties agreed on a settlement amount, and as a condition precedent to signing the settlement agreement Defendant demanded return of all documents produced….”  Now the opinion then says “… which included Plaintiff’s counsel’s work product,” but I don’t know how to take that because “documents produced” on its own wouldn’t support a reading that work-product must be returned.

Otherwise, the TN opinion to bolster the premise that requiring return of work product could be a problem spends a bit of time trying to (sort of) adopt the rationale of a North Dakota ethics opinion from 1997.  This part of that North Dakota opinion is fine: “Whether providing the opposing side access to or losing his or her own access to work product materials would restrict the attorney’s representation of other clients is a factual question the attorney must decide based on the documents involved and the facts and circumstances of the case.”

But, there is a key deficiency in the North Dakota opinion too , at least as described by the TN opinion, there is a seeming failure to recognize that if a client pays an attorney for work product the attorney creates, that work product also belongs to the client.  Remember, in this context RPC 1.16(d), which only provides the slimmest of windows for a lawyer to refuse to turn over work-product that a client hasn’t paid for, upon the termination of the representation.

So, when the Tennessee opinion quotes the North Dakota opinion to say: “Under 5.6(b) an attorney may not agree — even at a client’s request: To turn over to opposing party or counsel documents protected by the attorney work product doctrine if that action would restrict the attorney’s representation of other clients….,” it overlooks the fundamental concept that the client, not the attorney, makes the decision whether to settle a matter.  (RPC 1.2)  And, if the condition on settlement is that the attorney relinquish work product that now would belong to the client because the attorney’s fee will be paid, then… well, it’s pretty dangerous for an attorney to seek to blow up that settlement on the basis that the work product is the attorney’s alone to do with as she sees fit.

 

A little something to be thankful for

If you’re a lawyer, then many days you may find yourself either complaining that you are too busy or that you aren’t busy enough.  Rare is the time for lawyers (in my experience) when they think their workload lands in a “just right” kind of spot.  There actually can be such a thing as too busy.  In fact, the ethics rules in Tennessee (and elsewhere) even recognize this in a statement relegated to the Comment to RPC 1.3 (Diligence).    Comment [2] to RPC 1.3 of the ABA Model Rules (Tennessee’s provision is identical) reads:  “A lawyer’s work load must be controlled so that each matter can be handled competently.”

Unless you happen to work as a public defender though, you are very unlikely to end up with a workload that truly jeopardizes your ability to handle each of your cases competently.  For most lawyers who get to that place, they have no one to blame but themselves.  If you are a public defender, there’s a really good chance you are in that boat through no fault of your own.

Two news items this week help to drive this point home.  The first comes out of Maryland where a public defender’s overwhelming workload was actually cited by the trial court when ordering the retrial of a murder case that had ended in a conviction.  The defendant’s attorney, a public defender, overstepped his bounds by refusing to let his own client testify in her defense — a decision that RPC 1.2(a) clearly bestows unequivocally on the client.  The RPC 1.2(a) ethical transgression, and not a caseload at a level violating RPC 1.3,  was the substantive justification for the reversal, but the court went out of its way to attempt to make clear that it didn’t consider the error indicative of the type of attorney the public defender was.  Rather, the judge characterized the error as a side effect to having been handling 88 felony cases over a six month period, explaining in the ruling that the p.d. in question was “a very good attorney,” but “was simply overwhelmed by the number of cases that he had.”

The second new item comes out of New Orleans, where the Orleans Parish Public Defenders Office has filed a motion – indicated to be the first of several – with a criminal court judge to request that the office not be assigned any new cases.  The motion explains that the combination of excessive caseloads, budget cuts, hiring freezes, and staff shortages have all led to a situation where the members of the office aren’t able to provide “constitutional, effective representation.”  Contrary to how he views the world, the motion does not blame the former defensive coordinator of the New Orleans Saints in any fashion.  The Times-Picayune article on the story reports that the public defenders’ office estimates that it presently represents 85% of all felony criminal defendants in the Parish.  Local media also reports that the first day of a multiple day hearing on the motion has begun and the founder of The Innocence Project is expected to testify next week.

So, if you can’t think of anything else to be thankful for this week, be thankful that you’re not a public defender.  And, if you’re reading this, you likely aren’t.  Because you don’t have the time to spare.